A Model of Rational Competitive Bidding
Management SciencePublished 1 March 1969
Michael H. Rothkopf
Citations188
SJR quartileQ1
SJR score5.72
SNIP2.88
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Abstract
This paper presents a mathematical model of the bidding process that deals explicitly with the uncertainty of the bidders about the value of the subject of the auction. By dealing with this often ignored factor, it obtains equilibrium strategies and profits as a function of the number of bidders, the relative values they attach to the subject of the auction and their accuracy in estimating it. Models are developed for both highest-bid-wins and lowest-bid-wins auctions.
Keywords
Decision SciencesBusiness, Management and Accounting
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